You’re looking at prediction markets as a data source or a trading platform for your product. Maybe it’s algorithmic trading systems you’re building. Maybe you need event outcome data for forecasting models. Whatever it is, there’s one question you’re going to hit fast: Kalshi or Polymarket?
These are the two platforms that matter right now. Kalshi operates as a CFTC-regulated centralised exchange – think traditional financial platform with fiat USD settlement. Polymarket is the decentralised crypto alternative running on Polygon with on-chain settlement in USDC. The architectural differences between them? They’re going to shape your entire integration strategy.
In this comparison we’re examining seven decision factors: regulatory frameworks, trading architectures, settlement mechanisms, API access patterns, oracle models, performance characteristics, and developer experience. We’re giving you objective technical analysis, not advocacy. By the end, you’ll know which platform aligns with your regulatory posture, your technical capabilities, and your business requirements.
This guide is part of our comprehensive Understanding Prediction Markets and Their Rapid Rise from Political Tools to Mainstream Trading Platforms series, where we explore the complete landscape of this emerging technology.
What Are the Fundamental Differences Between Kalshi and Polymarket?
Kalshi got started in 2018 as the first regulated financial exchange offering prediction markets. It’s a Designated Contract Market under CFTC regulation. Polymarket is a decentralised protocol built on Polygon blockchain. It uses hybrid CLOB architecture with off-chain matching and on-chain settlement via the Conditional Tokens Framework.
Regulatory status defines everything. Every market on Kalshi requires regulatory approval. Polymarket ran decentralised in the U.S. until the CFTC hit them with a $1.4 million fine in January 2022 and forced them out of the American market. They’re now making a return to the U.S. with new CFTC approval.
Settlement currencies are different. Kalshi uses centralised off-chain fiat USD settlement based on self-certifying outcomes. Polymarket uses hybrid model with off-chain order matching and on-chain settlement via Polygon using USDC.
From a developer perspective, the infrastructure paradigms are completely different. Kalshi provides centralised API access – REST, WebSocket, and FIX protocol for institutional traders. Polymarket requires blockchain interaction with EIP-712 signed orders and smart contract calls.
If your team knows traditional backend development, Kalshi’s API will feel familiar. If you’re blockchain developers, Polymarket’s smart contract ecosystem is your territory.
Geographic availability creates constraints. Kalshi operates exclusively in the United States, excluding 8 states – Arizona, Illinois, Massachusetts, Maryland, Michigan, Montana, New Jersey, Ohio. Polymarket currently focuses on international markets outside the U.S., with American re-entry in progress.
Institutional positioning reflects strategic priorities. Kalshi targets regulated institutional trading with $1 billion in funding. Polymarket emphasises crypto-native composability with $2 billion ICE investment.
For understanding the complete CFTC compliance requirements governing both platforms, see our detailed regulatory framework analysis. For integrating Kalshi’s API into your applications, we provide comprehensive technical implementation guidance.
How Do CLOB and AMM Architectures Compare for Prediction Markets?
Both platforms use Central Limit Order Book (CLOB) architecture, not Automated Market Makers (AMM). This might surprise you if you’re used to DeFi protocols. But for prediction markets, CLOBs make more sense.
Prediction markets operate as fully-collateralised binary options on central limit order books with YES + NO = $1.00. A central limit order book is a real-time display of all active buy and sell orders. Users submit limit orders at specific prices, and the matching engine pairs buyers with sellers.
Kalshi implements fully off-chain CLOB matching with centralised order book management. It’s traditional exchange architecture supporting limit orders, market orders, and FIX protocol for institutional trading.
Polymarket uses hybrid CLOB with off-chain order management and on-chain execution. Orders are EIP712-signed structured data with price improvements benefiting the taker.
Why CLOB over AMM? CLOBs provide better price discovery, tighter spreads, and institutional-grade execution. AMMs suffer from impermanent loss. For prediction markets where prices should reflect actual probabilities, AMM slippage creates unacceptable distortions.
CLOBs require active market makers. AMMs provide passive liquidity, but that convenience costs you in execution quality. For trading integrations or data products, CLOB architecture gives you better fills.
For building decentralised prediction markets with smart contract implementation details, see our comprehensive guide. For security and manipulation prevention considerations around MEV, we cover oracle attack vectors and risk mitigation strategies.
What Are the Regulatory Trade-Offs Between CFTC-Regulated and Decentralised Platforms?
Your platform choice depends heavily on your organisation’s regulatory risk tolerance.
The Commodity Futures Trading Commission oversees all of Kalshi’s event contracts, ensuring each market adheres to strict U.S. laws designed to prevent market manipulation and fraud. Kalshi must meet core principles governing derivatives exchanges – market integrity, financial safeguards, manipulation protections. Every market Kalshi lists must be reviewed and cleared.
What does this mean for integration? Kalshi requires KYC/AML for all users thanks to CFTC regulation. Your users must verify identity before trading. You’ll need to build KYC infrastructure or partner with providers. You’ll face geographic exclusions – those 8 U.S. states won’t have access.
The upside? Legal certainty for U.S. operations. Fiat USD on/off-ramps that work with traditional banking. Institutional partnerships that require regulatory compliance. If you’re building for enterprises, fintech platforms, or anything touching traditional finance, Kalshi’s regulated status is your path forward.
Polymarket took the opposite route. After the 2022 enforcement action, Polymarket turned its sights on international audiences.
The decentralised model offers permissionless market creation and global access. Smart contracts enable trustless settlement. No central authority controls what markets exist or who can trade. For crypto-native projects prioritising composability and censorship resistance, this is your architecture.
But regulatory uncertainty remains. If you’re a U.S.-based company, integrating with Polymarket carries enforcement risk until their U.S. re-entry completes.
For complete regulatory framework for prediction markets analysis, we cover CFTC oversight, KYC/AML implementation, and geographic restrictions in depth.
How Do Settlement Approaches Differ: On-Chain vs Off-Chain?
Settlement is where architecture meets money. The technical approach each platform uses determines your integration complexity, reconciliation requirements, and trust model.
Kalshi settles trades off-chain in fiat USD through traditional payment rails. Positions are tracked in a centralised database. USD balances update instantly after trades execute. Withdrawals happen via ACH or wire transfer to linked bank accounts. When an oracle resolves a market, automated payouts credit winning positions immediately.
The developer experience is straightforward. You poll or subscribe via WebSocket for resolution events. When a market resolves, winning positions convert to USD in account balances. Your users withdraw like any other financial platform – ACH takes 1-3 business days, wire transfer same day for premium users.
Polymarket settles on-chain via Conditional Tokens Framework smart contracts on Polygon. Shares are ERC-1155 tokens using Gnosis’s Conditional Tokens Framework.
Here’s the technical flow. Each Polymarket market requires three parameters: questionId (IPFS hash), outcomeSlotCount (always 2 for binary), and Oracle Address. These inputs generate a conditionId via keccak256 hashing.
When you buy a position, the system maintains strict equivalence: USDC deposits mint paired YES/NO shares. After oracle resolution, token holders call redeemPositions to burn shares and claim their collateral portion.
The trade-offs are significant. Off-chain provides <15ms latency for position updates. On-chain requires blockchain confirmation – 2-3 seconds on Polygon. Off-chain allows instant capital redeployment. On-chain settlement may require waiting for blockchain finality.
Trust models differ. Off-chain requires trust in Kalshi as custodian and oracle. On-chain provides cryptographic proof of positions and outcomes. Everything’s verifiable on-chain. But you depend on UMA oracle security and smart contract correctness.
For developers, reconciliation implications matter. Off-chain enables traditional accounting integration – it’s just USD moving between accounts. On-chain requires blockchain indexing and wallet balance tracking. You’ll need to access archive nodes, parse events, handle chain reorgs.
Gas costs add friction. Condition Preparation requires multiple technical parameters. Position Splitting forces users to receive ‘conditional’ tokens that require trading before value realisation. Position Merging is required to retrieve initial collateral, adding friction and gas costs.
For decentralised architecture approach and Conditional Tokens Framework technical implementation details, see our smart contract implementation guide. For market integrity considerations and trust model analysis, we cover oracle attack vectors and custodial risks.
Which Platform Offers Better API Access and Developer Experience?
If you’re a backend developer who’s integrated with Stripe or AWS, Kalshi will feel familiar. If you’re a blockchain developer who’s built on Uniswap, Polymarket is your world.
Kalshi’s WebSocket API delivers real-time data streaming without constant polling. For institutional traders, Kalshi offers FIX protocol integration. REST endpoints cover markets, events, orders, and portfolio.
Authentication uses token-based auth – standard stuff for API developers. WebSocket API lets you subscribe to specific data channels like market updates or trade executions. Event-driven architecture patterns work beautifully.
FIX works best for high-frequency trading requiring the lowest possible latency. If you’re building institutional algorithmic trading systems, FIX protocol is your interface.
Rate limiting enforces tiered limits based on access level. You’ll discover exact limits during development.
Polymarket takes a different approach. The Polymarket Order Book API enables programmatic order management via REST and WebSocket. But orders are EIP712-signed structured data requiring wallet-based authentication.
You’re not just calling REST endpoints. You’re signing orders with private keys using EIP-712. You’re tracking nonces. You’re handling wallet security. The operator’s privileges are limited to order matching – operators can’t set prices or execute unauthorised trades.
SDK availability varies. Kalshi provides official Python and JavaScript SDKs. Polymarket relies on community SDKs – polymarket-py for Python, various TypeScript implementations.
Developer workflow differs dramatically. Kalshi supports event-driven architecture with WebSocket streaming. Polymarket requires blockchain indexing using The Graph or custom indexers, mempool monitoring, and handling chain state.
Testing environments? Kalshi provides a demo/sandbox environment. Polymarket testing requires testnet deployment – Mumbai testnet for Polygon.
Integration complexity reflects paradigm differences. Kalshi integration resembles traditional exchange APIs like Coinbase. If your team has built fintech integrations, the learning curve is minimal. Polymarket requires smart contract interaction expertise. If your team hasn’t built on Ethereum or Polygon, budget for significant learning.
For complete Kalshi and DFlow integration guide with API walkthrough, we provide comprehensive implementation guidance. For smart contract implementation and Polymarket integration, see our detailed technical guide.
What Are the Performance and Scalability Considerations?
Performance matters. If you’re building algorithmic trading, milliseconds determine profitability.
Kalshi’s off-chain architecture delivers order matching in single-digit milliseconds – fast enough for most algorithmic strategies but not microsecond-scale high-frequency trading. For institutional traders using FIX protocol, Kalshi provides the lowest latency interface available.
Polymarket’s hybrid model achieves fast off-chain matching but introduces blockchain settlement latency – 2-3 seconds on Polygon.
Throughput limits differ. Kalshi is limited by centralised infrastructure capacity and rate limits. Polymarket is limited by Polygon blockchain throughput – theoretically ~65,000 TPS, realistically ~30 TPS for complex transactions.
Cost structures vary. Kalshi charges platform fees as a percentage of trade value. Withdrawal fees apply ($2 for debit). Polymarket charges platform fees plus minimal Polygon gas fees.
High-frequency trading implications? Kalshi supports WebSocket streaming and FIX protocol for sub-second execution. Polymarket’s blockchain settlement makes microsecond-scale HFT impractical. You can do algorithmic trading on Polymarket, but you’re operating at different time scales.
Infrastructure requirements reflect architecture choices. Kalshi requires API client implementation and WebSocket connection management. Polymarket requires blockchain node access via RPC endpoints or third-party providers like Alchemy or Infura.
Network reliability differs. Kalshi depends on centralised platform uptime. When Kalshi’s down, you’re down. Polymarket depends on Polygon network health.
For risk assessment for platforms and reliability considerations, we cover infrastructure resilience and uptime security.
How Do Oracle Models Compare: Centralised vs UMA Optimistic Oracle?
Oracles determine who wins and who loses. The resolution mechanism defines trust assumptions and settlement timing.
Kalshi uses a centralised oracle operated by the exchange. Kalshi operates with self-certifying outcomes based on authoritative data sources. Exchange staff determines outcomes based on official websites, government reports, or reputable data providers. Resolution typically happens within hours.
The trust model is simple: you trust Kalshi. They’re a CFTC-regulated entity with reputation at stake. If they manipulate outcomes, they lose regulatory approval and their business dies.
Polymarket employs UMA’s optimistic oracle which finalises outcomes through economic incentives and decentralised dispute resolution.
Here’s how it works. Any user can propose an outcome by posting a $750 bond. If unchallenged within 2 hours, the proposal automatically accepts. Disputes trigger voting among UMA tokenholders.
Optimistic Oracle V2 handles ~98.5% of requests without escalation. Most markets resolve cleanly within 2 hours. When disputes arise, resolution requires 48 to 96 hours.
Resolution speed matters. Centralised oracle resolves in hours. Optimistic oracle requires a minimum 2 hours for undisputed outcomes, potentially days for disputed outcomes.
Trust assumptions differ. You’re trusting CFTC oversight and Kalshi’s reputation. When UMA’s market capitalisation is smaller than the value it secures, whale addresses create structural conflicts between objective truth and financial interests.
Dispute costs create friction. Kalshi has no dispute mechanism – you contact customer support if you think an outcome is wrong. Polymarket disputes require bond posting. If your challenge fails, you lose your bond.
Integration implications? Kalshi oracle results are available via API immediately after resolution. Polymarket oracle results require monitoring blockchain events and handling dispute states.
For security and manipulation prevention covering oracle attack vectors and security models, we provide comprehensive risk analysis.
Which Platform Should Technical Leaders Choose for Their Use Case?
Choose Kalshi for regulated enterprise environments requiring CFTC compliance, traditional finance integrations, fiat USD settlement, low-latency algorithmic trading, and established institutional partnerships. Choose Polymarket for crypto-native applications prioritising decentralisation, DeFi composability, global permissionless access, on-chain verifiability, and smart contract integration.
Kalshi use cases? Institutional trading desks integrating prediction market data into risk models. Fintech applications with banking integrations requiring fiat rails. Algorithmic trading firms requiring low latency and FIX protocol support. Compliance-first organisations where regulatory approval is mandatory. U.S.-focused products targeting domestic markets.
StockX and Kalshi’s strategic collaboration enabling event contract trading tied to sneaker releases demonstrates the institutional partnership potential. Kalshi funding sources include ACH bank transfers, wires, debit cards, PayPal, Apple Pay, Google Pay, crypto.
Polymarket use cases? DeFi protocols requiring composability with other smart contracts. Crypto-native applications where users already hold crypto assets. Global prediction market products serving international users. Decentralised governance platforms using prediction markets for decision-making. Blockchain research projects.
Polymarket funding requires Visa/Mastercard via MoonPay to buy USDC, or USDC via other exchanges. Polymarket charges 0.01% taker fee with external fees for crypto transfers.
Hybrid approaches exist. Some teams integrate both platforms – Kalshi for regulated U.S. markets, Polymarket for international crypto markets. DFlow‘s Solana tokenisation layer enables Kalshi event contract tokenisation for composability.
Risk assessment framework: Regulatory risk (CFTC enforcement vs smart contract bugs), operational risk (platform downtime vs blockchain network issues), integration risk (API versioning changes vs smart contract upgrades), counterparty risk (custodial trust vs oracle security).
Start with a proof of concept. Test in demo/sandbox environments. Evaluate settlement flows. Measure latency requirements. Assess documentation quality. Evaluate team learning curve.
For broader context on the prediction market ecosystem beyond Kalshi and Polymarket, return to our comprehensive prediction market overview. For understanding regulatory oversight and detailed compliance framework analysis, we cover CFTC requirements comprehensively. For complete Kalshi integration walkthrough, we provide code examples and implementation patterns. For Polymarket smart contract implementation, we cover CTF integration in detail.
FAQ Section
What is the main technical difference between Kalshi and Polymarket?
Kalshi operates as a centralised CFTC-regulated exchange with off-chain order matching and fiat USD settlement via traditional payment rails. Polymarket uses hybrid CLOB architecture with off-chain order matching and on-chain settlement through Ethereum smart contracts on Polygon blockchain, settling in USDC cryptocurrency. The fundamental difference is centralised financial infrastructure vs decentralised blockchain settlement.
For prediction market fundamentals and foundational concepts, we cover the basics comprehensively. For complete regulatory framework analysis, we provide detailed comparison of compliance requirements.
Can I use the same trading strategies on both platforms?
Both platforms support limit orders and market orders via CLOB architecture, but implementation differs significantly. Kalshi provides traditional REST/WebSocket/FIX APIs suitable for algorithmic trading. Polymarket requires EIP-712 signed orders and smart contract interactions. Kalshi offers lower latency for high-frequency strategies. Polymarket’s blockchain settlement makes microsecond-scale HFT impractical but works fine for longer-timeframe strategies.
For implementing Kalshi integration details and API patterns, we provide complete walkthrough. For Polymarket smart contract integration, we provide implementation guidance with code examples.
Which platform has better liquidity?
Liquidity varies by market and changes over time. Kalshi typically has deeper liquidity in U.S. political and economic events due to institutional market makers. Polymarket historically shows higher volume in crypto-related and international events with strong crypto-native trader participation. Evaluate order book depth and spread for specific markets relevant to your use case.
For market selection strategies, our broader prediction market overview provides a framework for evaluating individual market liquidity.
Do I need KYC/AML compliance to integrate with these platforms?
Kalshi requires KYC/AML for all users due to CFTC regulation, including API integrations. Users must verify identity before trading. Budget for KYC infrastructure integration or third-party KYC provider partnerships. Polymarket currently operates internationally without mandatory KYC (wallet-based access), but U.S. re-entry may introduce compliance requirements.
For complete regulatory framework for prediction markets and compliance implementation strategies, we cover KYC/AML requirements in detail.
How do I handle oracle resolution in my integration?
Kalshi’s centralised oracle posts resolutions via API, enabling straightforward polling or WebSocket subscription for resolution events. Polymarket’s UMA optimistic oracle requires monitoring blockchain events for proposal, challenge, and settlement states with a 2-hour minimum resolution window. Your integration needs to handle multiple event types: outcome proposed, challenge submitted, dispute resolved.
For oracle security implementation and manipulation prevention, we cover attack vectors and mitigation strategies comprehensively.
Which platform supports international users?
Polymarket currently focuses on international markets outside the U.S. (U.S. re-entry in progress following CFTC approval). Serves global users without geographic restrictions beyond U.S. exclusion. Kalshi operates exclusively in the United States, excluding 8 states (Arizona, Illinois, Massachusetts, Maryland, Michigan, Montana, New Jersey, Ohio). For global products, Polymarket provides broader geographic access. For U.S.-compliant solutions, Kalshi offers regulatory certainty.
For geographic considerations related to regulatory frameworks, we provide detailed analysis of compliance requirements across jurisdictions.
Can I integrate both platforms in the same application?
Yes, many sophisticated applications integrate both platforms to maximise market coverage. Use Kalshi for CFTC-regulated U.S. markets with institutional liquidity, and Polymarket for international crypto-native markets. Note architectural differences: you’ll need both traditional API integration code (Kalshi REST/WebSocket clients) and blockchain interaction logic (Polymarket smart contract calls, EIP-712 signing). Consider DFlow’s Solana tokenisation layer for cross-platform composability.
For multi-platform integration strategies, our comprehensive prediction market guide discusses portfolio approaches and best practices.
What are the gas costs for Polymarket transactions?
Polymarket uses Polygon (Ethereum Layer-2), where gas costs range from $0.01-0.10 per transaction depending on network congestion. Settlement transactions (claiming winning shares after oracle resolution) require on-chain execution and incur gas fees. Position opens via EIP-712 signed orders are free (off-chain matching), but claiming collateral after market resolution requires a blockchain transaction.
For cost analysis in DeFi integrations and gas optimisation strategies, our smart contract implementation guide provides comprehensive technical guidance.
How quickly do withdrawals process on each platform?
Kalshi processes withdrawals to linked bank accounts via ACH (1-3 business days) or wire transfer (same day for premium users). Polymarket enables instant withdrawals by transferring USDC from wallet to any address or centralised exchange, limited only by Polygon network confirmation time (2-3 seconds). Fiat off-ramps from USDC add exchange withdrawal timing (hours to days depending on exchange and method).
For settlement mechanisms comparison, see the “How Do Settlement Approaches Differ” section above.
Which platform is better for building a prediction market product?
Neither platform currently offers white-label infrastructure for building your own prediction market. Both are consumer/institutional trading platforms, not infrastructure providers. For building custom prediction markets, consider deploying your own smart contracts using frameworks like Gnosis Conditional Tokens Framework (Polymarket’s underlying technology) or integrating prediction market SDKs. Alternatively, explore platforms like Zeitgeist or Omen for permissionless market creation.
For building custom prediction markets, we cover smart contract implementation and CTF integration with detailed code examples.
What happens if Kalshi’s platform goes down?
As a centralised platform, Kalshi downtime halts all trading, order management, and API access. Your integration loses connectivity until platform recovery. Monitor uptime SLAs and build retry logic with exponential backoff. Implement circuit breakers to prevent request flooding during outages. Diversification across multiple platforms (integrating both Kalshi and Polymarket) reduces operational risk from single-platform dependency.
For reliability and uptime security considerations including circuit breakers and failover strategies, we provide infrastructure resilience guidance.
Can I use leverage or margin on these platforms?
Currently, neither Kalshi nor Polymarket offers margin trading or leverage. All positions require full collateral ($1 per contract on Kalshi, equivalent USDC on Polymarket). Some DeFi protocols built on prediction markets may introduce leverage in the future (e.g., via collateralised lending against prediction market positions), but native platforms require 100% capital commitment per contract.
For advanced trading strategies and potential future developments, our broader prediction market context tracks ecosystem innovations and emerging trends.
